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1st INVESTMENT FORUM TRACECABRUSSELS 12th OCTOBER 2010BRUSSELS, 12th OCTOBER 2010

PROJECTELECTRIFICATION OF THE “DOSTYK AKTOGAY”ELECTRIFICATION OF THE “DOSTYK - AKTOGAY”

RAILWAY SECTION

REPUBLIC OF KAZAKHSTANREPUBLIC OF KAZAKHSTAN

Electrification of the “Dostyk - Aktogay” railway section

• The “Dostyk Aktogay” railway section belongs toGEORAPHICAL DESCRIPTION

• The “Dostyk – Aktogay” railway section belongs to the main EurAsian transport corridors TRACECA and TrasEurAsian railway mainline (TARM)TrasEurAsian railway mainline (TARM)

• The “Dostyk – Aktogay” railway section is non-alternative route for railway transportations from y pcentral and south-west regions of China to Central Asian countries, Persian harbor countries and Europe

Brussels, 12th October 2010 First TRACECA Investment Forum 3

TECHNICAL DESCRIPTION

• Length 309 km• Length – 309 km• Term of construction – 36 months

Present cargo flow 15 5 mln tons• Present cargo flow – 15,5 mln. tons• Forecasted cargo flow in 2020 – 20 mln. tons

M i itt d d ti f t i• Maximum permitted speed on section for trains:– for freight – 70 km/h;

f 80 k /h– for passenger – 80 km/h

Брюссель, 12-е октября 2010 Первый Инвестиционный Форум ТРАСЕКА 4

SOCIAL-ECONOMIC DESCRIPTION

Project implementation generates new workplaces:- during construction – 1 020 employees;- during operations – 490 employees

Project implementation considers to use the newestProject implementation considers to use the newest technologies together with world level modern management approaches


INVESTMENTS AND PAYMENTS• Investments volume 546 mln USD• Investments volume – 546 mln.USD• Savings at operating expenses from transition to

electric traction (for 30 years) – 2 186 mln USDelectric traction (for 30 years) – 2 186 mln.USD• Net Income (for 30 y.) – 1 054 mln.USD• Payback period:• Payback period:

simple – 13 years;discounted 22 yearsdiscounted – 22 years


SOCIAL-ECONOMIC DESCRIPTIONSProject implementation provides:j p pfull liquidation of the pollutions to atmosphere from diesel trains (958 tons/year);transportation costs reduction on 25-30%;reduction of the fuel consumption on 1,5–1,8 times;pincrease of the average speed at the section on 9–11 km/h;increase of the average weight of train on 500-550 tons;increase of the railway capacity on15-30%


CONCLUSION

Investments volumeInvestments volume546 mln. USD

The main task of the transport sector is the development of the transport and communication system, which is capable to completely satisfies the needs of economy and population in transport services


y p p p

FIRST TRACECA INVESTMENT FORUM BRUSSELS, 12th October 2010,

CONSTRUCTION OF NEW RAILWAYBEINEU SHALKAR«BEINEU - SHALKAR»

REPUBLIC OF KAZAKHSTAN

• New railway will provide the shortest way from south

GEOGRAPHICAL DESCRIPTION

y p yKazakhstan’s regions to the port of Aktau, thus TRACECA corridor will obtain additional advantage and the project will allow to activate freight flow toand the project will allow to activate freight flow to China, Azerbaijan, Iran through this port

• Realization of the project will reduce the TRACECA corridor length within Kazakhastan by 485 km andcorridor length within Kazakhastan by 485 km and delivery time of goods to 10-11 hours

• New railway will allow to cirlce around the heavy-t ffi ti M k t K di h hi h itraffic section «Makat – Kandiagash», which is a bottleneck of the corridor regarding capacity and shipment distance

Brussels, 12th October 2010 First Investment Forum TRACECA12

TECHNICAL DESCRIPTION

• Lenght 471 km• Period of construction 45 months• Average annual volume of traffic 12 million tons;• Project includes the construction of

medium and small bridges – 20;grailway over bridges - 2;

• Transported goods: p goil, oil products, grain, construction materials, metal, mineral and chemical fertilizers

Brussels, 12th october 2010 First TRACECA Investment Forum 13

SOCIO-ECONOMIC DESCRIPTION• New railway creates conditions for more effective

transport operations of main oil producing state regiontransport operations of main oil-producing state region and for the implementation of export cargo transportation (oil, grain, metal) through the port of p ( , g , ) g pAktau

• Realization of the project will provide new vacancies:jduring construction 4,860 people;during exploitation 1,317 people;g p , p p ;

• Realization of the project will increase in credit for individuals, rural districts, trade networks and other services


INVESTMENT AMOUNT AND PAYMENT

• Investment amount 1,096 Million USD • Costs for set exploitation period 799 Million USD• Net profit for set exploitation period 640.2 million USD• Internal Rate of Return (IRR) 4 0 %• Internal Rate of Return (IRR) 4.0 %• Net discount profit (Е=8 %) equals 21.5 million USD• Internal rate of profitability 8.8 %p y• Payback period:

simple 10.5 yearsdiscounted 22 years

• Project is planned to be realized by direct investment


OTHER SOCIAL ECONOMIC DESCRIPTIONSOTHER SOCIAL-ECONOMIC DESCRIPTIONS• Project objective: Creation of an optimal route• Feasibility Study of the project is developed;y y p j p ;• As a result of shipment distance reduction, the competitiveness

of following enterprises‘ is increasing:ТОО C ti K kh iТОО «Corporation «Kazakhmis»;ТОО «MittalStil Temirtau»; Jairemski ore mining and processing enterprise and otherJairemski ore mining and processing enterprise and other.

• Multiplicative effect:Change mono-specialization to diversification of regional economyCreation and development of service organizationsS i l i d l t f i dSocial-economic development of regions passed


SUMMARY

Investment Amount

1,096 Million USD

153.5 Billion Tenge(Exchange rate: 1 USD – 140 tenge)

Railway transport in Kazakhstan provides more than 70% of freight flow and 50% of passenger flow; no alternative in mass cargo transportation, as for coal, ore, crushed stone, metal and others.


FIRST TRACECA INVESTMENT FORUMBrussels 12th October 2010Brussels, 12th October 2010

National Road Rehabilitation (Osh-Batken-Isfana)National Road Rehabilitation (Osh Batken Isfana)

KYRGYZ REPUBLIC

National Road Rehabilitation (Osh-Batken-Isfana)


TECHNICAL DESCRIPTION• Period of construction:

– 2 years; Feasibility study was created in 2001 and fully updated during 2008-2009 thereafter.

• Transported goods:• Transported goods:– Consumer goods, equipment, agricultural products, semi-

products, and row materials.

• Length, freight flow:– 229 Km of Osh-Batken-Isfana Road non-covered by

financing out of 385 km in total; 100 trucks per day by financing out of 385 km in total; 100 trucks per day by 2030 plus 25 vehicles each day.

• Steps of construction or rehabilitation:– Phase I; Phase II


SOCIO-ECONOMIC DESCRIPTION• Improvement/Rehabilitation of the Road pavement will

result in reduction of:– VOC;

Freight transportation costs;– Freight transportation costs;– Travel time;– Fuel consumption;p ;– Overall road user costs.

• The above benefits:– Regional cooperation and development;– International trade;

Kyrgyz Republic transport independence – Kyrgyz Republic transport independence.


INVESTMENT AMOUNT AND REPAYMENT• European Commission is the first int’l donor who started financing:

– The Grant amount is Euro 6,3 million.,– Total length of Section to be rehabilitated is 23,5 Km.– Interested in providing Euro 8.6 million, 7,2 million of which are for civil works.

• EBRD:– USD 35 million for 60 km, Loan agreement was signed on July 14, 2009.

• World Bank:– USD 25 million for 32 km, relevant Agreement was signed on December 3, 2009.

DONORGrace Period

Total credit period

Grant element

Commission rate

Reservation fee(commitment)

Service fee(management)

Credit Withdrawal fee

IDA (WB) 10 years 40 years 45% 0,50% 0,75%

EBRD 5 years 20 years n/a 0,50% 1% flat payment Variable Libor +1%

EC 100%


OTHER SOCIO-ECONOMIC DESCRIPTIONS• Feasibility Study is fully updated;• Improvement of ecological environment:

– reduction of emissions, noise;i ti d i t ill t t i ifi t– existing road improvement will not generate significant

environmental impacts provided that the works are designedand executed in accordance with sound engineering practiceand that the mitigation and precautionary measures are fullyimplemented;

– EМР has been already prepared but should be updated.EМР has been already prepared but should be updated.

• Final goal of the Project:– Improvement of existing road, reduction of VOC, regional

cooperation development.


SUMMARY• EC, EBRD and WB provided

USD 81 million in total for • Small zoomed part of USD 81 million in total for rehabilitation of Phase I,

• Current financing shortage

• Small zoomed part of the map

USD 150 million

The Project reduces existing border conflicts and facilitates development ofregional and local economic relations among PRC, KR, northern Tajikistan,regional and local economic relations among PRC, KR, northern Tajikistan,Uzbekistan and Kazakhstan through rehabilitation of Osh-Batken-IsfanaRoad section that represents an extension of Osh-SaryTash-Irkeshtam


Transport Corridor.

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